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Bullish Accumulation

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A good day for bulls delivered a breakout in the Dow Jones Industrials Index and across the board accumulation for other indices Action in the Dow Jones Index delivered not just a break of declining resistance but a close above the 200-day MA. Technicals are net positive but not yet overbought.

And so the Shorts dance continues...

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It seems every market gain is soon followed by a loss (and a potential shorting opportunity), but each time shorts are left hung out to dry. Will this time be different? Probably not, but whipsaw trades remain a key risk after a bounce like the one we have seen. Of the low hanging fruit, we have a Dow Jones Index which has reversed off resistance (and 200-day MA), albeit with a small bullish hammer (the significance of which is reduced as the index is overbought on near term stochastics - but not on an intermediate time frame). The 50-day MA is available to use as support, and relative performance is positive versus the Nasdaq 100. While action suggests this will break through its 200-day MA, the short position has a small edge until proven otherwise.

Friday's Gains Squeeze Shorts But Don't Follow Through

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There wasn't a whole lot to Friday except that any shorts will have been squeezed by the morning gap. Luckily for them, there wasn't any follow through but there was higher volume accumulation; suggesting there are more bulls than bears - even after a +10% gain from lows.  Should markets undercut the nascent swing low from last Wednesday then there is still a good chance buyers will step in to defend the December low. The S&P didn't do a whole lot outside of the morning gap but neither was there any real change in supporting technicals. Assume bulls have control unless there is a close below 2,600.

Once again, looks like Shorts will be whipsawed... again.

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Today wasn't the day but every time we get a possible sell/short signal, buyers come in to halt the sell-off.  Tomorrow (or Monday) could be the day markets rally to new swing highs (and hit existing short stops) but action over the last couple of days looked more bullish than anything else. The Russell 2000 was able to dig in at its 50-day MA, with the 20-day MA fast approaching to lend support. Technicals are net bullish but it's price action which looks like it will deliver. However, relative performance is ahead of its peers but it's not strengthening in a manner to suggest it will lead.  Also, its trading just below resistance.. So, look for gain, but if there is an undercut of Thursday's open it could get ugly quick. The S&P finished with a nice inside day, which itself is a swing trade opportunity (trade break of today's high/low with a stop on the flip side of the range). The 50-day MA is there for support and volume even edged a little higher to m

Tech Reverses Off Resistance; Bull Traps for Semiconductors and Russell 2000

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After two short plays were cut from under Large Cap traders it's now the turn of Small Caps and Tech indices to take a second bite of the cherry. In the case of Tech indices, there is resistance to work with too. The Russell 2000 finished the day with a 'bull trap', reversing Friday's breakout. This is a fresh shorting opportunity with a stop above 1,487. Technicals are bullish so there is no suggestive weakness which may guide to further downside so keep stops tight.  The last stop was whipped out so without clear resistance there is a chance this could follow with another whipsaw signal.

Short Squeezed Again; Rally Gains Momentum

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Friday's second day of gains put another squeeze on shorts. Resistance was handily broken on higher volume accumulation leaving markets in an area of indecision with neither shorts nor longs holding a clear advantage. However, each advance strengthens the December swing low as a major low - opening up the next retest as a buying opportunity. The S&P pulled away from congestion on net bullish technicals. Next upside target is the 200-day MA but the index is underperforming against the Russell 2000.

Short Trades Limp Out

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Yesterday's swing trade will have stopped out the aggressive short trades at the narrow doji, where the doji range was used as a stop. Shorts using the 50-day MA as a stop will still have a little room left to play with. Those looking for a new shorting opportunity may use today's doji as the entry trigger; shorting loss of doji low with stop on break of doji high (or a long trade on the reverse break). The aforementioned trade looks clearest on the S&P where it edged above resistance but not enough to break beyond the 50-day MA; I have marked a second (short) entry signal but if it closes above the 50-day MA then the last chance saloon for these trades will be done. It's a similar picture for the Dow Industrials Somewhat ironically, the Semiconductors might have the best shorting play; we have a close near the low of the day after peaking last week. The index is above the 50-day MA but it's not looking like it will stay there much longer. There is an

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